Problem

The following information is available for Lock-Down Company, which produces special-order...

The following information is available for Lock-Down Company, which produces special-order security products and uses a job order cost accounting system.

 

April 30

May 31

Inventories

Raw materials  

$40,000

$ 50,000

Goods in process  

9,600

19,500

Finished goods  

60,000

33,200

Activities and information for May

Raw materials purchases (paid with cash)  

 

189,000

Factory payroll (paid with cash)  

 

400,000

Factory overhead

Indirect materials

 

12,000

Indirect labor

 

75,000

Other overhead costs

 

100,500

Sales (received in cash)

 

1,200,000

Predetermined overhead rate based on direct labor cost

 

65%

Compute the following amounts for the month of May.

1.

Cost of direct materials used.

4.

Cost of goods sold.*

2.

Cost of direct labor used.

5.

Gross profit.

3.

Cost of goods manufactured.

6.

Overapplied or underapplied overhead

*Do not consider any underapplied or overapplied overhead.

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